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    UK Competition Regulator To Look into Major AI Partnerships: Microsoft-Mistral, Amazon-Anthropic, and More

    The Competition and Markets Authority (CMA), the competition watchdog of the United Kingdom, has invited comments from third parties to asses whether the partnerships between Microsoft and Mistral AI; Amazon and Anthropic; and Microsoft’s arrangements with Inflection AI, need to be reviewed under UK’s merger laws and the impact of these collaborations on competition in the UK.

    The invitation to comment is the first part of the CMA’s information-gathering process, which precedes a formal Phase 1 investigation of the deals. According to a press statement by the regulator, the invitation to comment comes in view of a recent CMA report highlighting three interlinked risks to open and fair competition in the markets for AI Foundation Models (FM):

    • Firms may indulge in controlling critical inputs for developing FMs and restrict access to shield themselves from competition.
    • Powerful incumbents could exploit their positions in consumer or business facing markets to distort choice in FM services and restrict competition in deployment.
    • Partnerships involving key players could exacerbate existing positions of market power through the value chain.

    The CMA has identified an interconnected web of over 90 partnerships and strategic investments involving the same firms and has noted that partnerships involving major AI companies could further strengthen their dominance in the FM markets.

    Recent partnerships between major AI companies:

    In March, Amazon announced that it invested $2.75 billion into AI startup Anthropic. The agreement will allow the e-commerce company to use Anthropic’s AI models, while Anthropic will be using AWS Trainium and Inferentia chips to build, train, and deploy its future AI models.

    During the same period, in a licensing deal with Inflection AI, Microsoft agreed to pay $650 million in cash to gain access to Inflection AI’s models and hire some employees from the AI startup, including its co-founders, reported Reuters. On March 19, Microsoft revealed in a blogpost that Mustafa Suleyman, DeepMind and Inflection Co-founder, had joined the company to lead its Copilot AI service.

    In February, Microsoft announced a multiyear partnership with French AI startup Mistral AI. The partnership allows Mistral AI access to infrastructure from Microsoft’s Azure AI to develop the next generation of large language models (LLMs). The new models will also be available for use on the Azure AI platform, which provides various AI services, including OpenAI’s GPT-4.

    Competition regulators around the world are taking steps to monitor collaborations between AI companies: 

    • In December 2023, the CMA invited comments on whether the partnership between Microsoft and OpenAI has resulted in a relevant merger situation and whether this would impact competition in the UK. Similarly, the European Commission announced in January this year that it is looking into whether there are competition concerns in the generative AI market, including whether the partnership between OpenAI and Microsoft might be reviewable under the EU’s merger regulation.
    • In June 2023, the United States Federal Trade Commission (FTC) published a blog detailing the competition concerns surrounding Generative Artificial Intelligence. The FTC explained that access to data, skilled talent, and computational resources are the building blocks of generative AI, and that control over these building blocks can affect competition in the AI market.
    • In January this year, the FTC initiated an investigation into investments and partnerships between Microsoft and OpenAIAmazon and Anthropic, and Google and Anthropic. The FTC had sought more information from the companies on their partnerships to understand their impact on competition in generative AI, including information related to market share, competitors, potential for sales growth, or expansion into product or geographic markets.
    • Most recently, India’s Competition Commission of India has invited proposals to conduct a market study on Artificial Intelligence (AI) and competition in India. Through the study, the CCI aims to understand the emerging concerns around competition in the development and deployment of AI systems and its impact on innovation in key sectors. The CCI has stated in a Request for Proposal document that it intends to study concerns related to competition within AI ecosystems as well as the potential impact of application of AI on competition in “key user industries” such as retail, and e-commerce.

    Also Read

    The post UK Competition Regulator To Look into Major AI Partnerships: Microsoft-Mistral, Amazon-Anthropic, and More appeared first on MediaNama.

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